| Promotion tip 2. Margins
If one of your
customers told you that he’d give you $2,000 more business
this month than he gave you last month in exchange for a $80 item,
would you do it? What if 100 of your customers said the same thing?
Would you accept the $200,000 in extra business for $8,000 in incentives
or would you say that 4% is too much margin to give back to the customer?
There are many
reasons to offer incentives and only one not to. Most companies
have the capacity to easily handle more business at little extra
cost. Utilities remain the same, you’re already sending a truck
their way and have them on the phone. When you increase the dollar
amount of the sale, the cost per transaction goes down!
My clients
who extensively track their corporate diamond promotions tell me that margins on customers
who earn a diamond as gift are higher than on customers who don’t! The only
reason not to offer an incentive is if you have more business than
you can handle.
After a profitable
promotion, do be assured that you have received the extra
business because of it. Don’t think that for the first time in
10 years a January was better than a December, or you sold more
of a certain product than you sold before because the business “just
happened to be there”. Don’t believe that it was only
a coincidence that business was up.
You ran a promotion and achieved
your goal.
Successful companies see that the promotion created the success and look for expansion in better promotions.
Incentives ...
when done correctly will increase sales. When sales are written
correctly they will increase profits.
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